Beyond Tree Models: A Hybrid Model of KAN and gMLP for Large-Scale Financial Tabular Data

TL;DR

This paper introduces TKGMLP, a hybrid neural network combining Kolmogorov Arnold Networks and Gated MLP, designed to handle large-scale, heterogeneous financial tabular data more efficiently than traditional tree models.

Contribution

The paper presents a novel hybrid model TKGMLP and a new feature encoding method tailored for numerical data, improving scalability and accuracy in financial tabular data analysis.

Findings

Achieves state-of-the-art results on credit scoring dataset.

Model performance improves with increasing dataset size.

Feature encoding significantly boosts prediction accuracy.

Abstract

Tabular data plays a critical role in real-world financial scenarios. Traditionally, tree models have dominated in handling tabular data. However, financial datasets in the industry often encounter some challenges, such as data heterogeneity, the predominance of numerical features and the large scale of the data, which can range from tens of millions to hundreds of millions of records. These challenges can lead to significant memory and computational issues when using tree-based models. Consequently, there is a growing need for neural network-based solutions that can outperform these models. In this paper, we introduce TKGMLP, an hybrid network for tabular data that combines shallow Kolmogorov Arnold Networks with Gated Multilayer Perceptron. This model leverages the strengths of both architectures to improve performance and scalability. We validate TKGMLP on a real-world credit scoring dataset, where it achieves state-of-the-art results and outperforms current benchmarks. Furthermore, our findings demonstrate that the model continues to improve as the dataset size increases, making it highly scalable. Additionally, we propose a novel feature encoding method for numerical data, specifically designed to address the predominance of numerical features in financial datasets. The integration of this feature encoding method within TKGMLP significantly improves prediction accuracy. This research not only advances table prediction technology but also offers a practical and effective solution for handling large-scale numerical tabular data in various industrial applications.